| --- | --- | --- | --- | --- | --- | |---------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | Results | | | | | | | January - March | | | | | | | 2020 | | | | | | Disclaimer This document and any related conference call or webcast (including any related Q&A session) may contain forward-looking statements and information (hereinafter, the "Statements") relating to the Telefónica Group (hereinafter, the "Company" or "Telefónica") or otherwise. These Statements may include ...

As filed with the Securities and Exchange Commission on February 20, 2020 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file numb ...

Financial Performance - Capital expenditures totaled R$8.2 billion for the year ended December 31, 2018, primarily for network expansion [512]. - The company distributed dividends and interest on shareholders' equity amounting to R$7.0 billion in 2018, up from R$4.6 billion in 2017 [515]. - Net cash provided by operations was R$11.9 billion in 2018, compared to R$12.6 billion in 2017 [516]. - For the fiscal year ended December 31, 2018, the company proposed an additional dividend of R$2.5 billion [517]. - The adoption of IFRS 9 resulted in a decrease of R$364 million in retained earnings due to increased bad debt provisions [524]. - The company recognized an increase in retained earnings of R$156 million as of January 1, 2018, due to the first-time recognition of contract assets [536]. - The company expects significant impacts on its financial statements from the adoption of IFRS 16, particularly in recognizing rights-of-use assets and lease obligations [545]. - The company is required to distribute a minimum dividend of 25% of adjusted net income, as per Brazilian Corporate Law [512]. - Adjusted net income is defined as net income adjusted for allocations to legal, statutory, and contingency reserves [513]. - The company estimates that the adoption of IFRS 16 will result in the recognition of rights-of-use assets valued between R$8.4 billion and R$9.2 billion in the opening balance sheet for 2019 [546]. Investments and Expenditures - In 2018, the company invested R$62.1 million in research and development, an increase from R$52.8 million in 2017 and R$50.9 million in 2016 [548][549]. - The company may seek financing for capital expenditures from local and foreign financial institutions, including BNDES [512]. - Total contractual obligations as of December 31, 2018, amount to R$6.86 billion, with loans, financing, and leases accounting for R$2.97 billion and debentures for R$3.17 billion [557]. - The company’s long-term debt, including loans, financing, leases, and debentures, totals R$4.68 billion as of December 31, 2018 [559]. Business Strategy and Market Outlook - The company aims to enhance its mobile and fixed segment infrastructure to maintain its 4G and FTTH footprint, preparing for long-term opportunities such as 5G technology [552]. - The macroeconomic environment is recovering, with expectations for a competitive landscape that emphasizes sustainability and profitability while investing in new technologies like FTTH and 4.5G [553]. - The company expects revenue growth to be driven by data and digital services over connectivity in the coming years [555]. Corporate Governance - The company has a structured approach to corporate governance, ensuring accountability and oversight through its various committees [586]. - The company’s statutory Fiscal Board is responsible for reviewing financial statements and management proposals, but it has only an advisory role and does not participate in management [591]. - The Control and Audit Committee is responsible for examining the company's management report and financial statements, and it meets four times per year [596]. - The Nominations, Compensation and Corporate Governance Committee meets two times per year and is responsible for assessing management's overall compensation [598]. - The Service Quality and Marketing Committee is tasked with reviewing quality indices of services and ensuring commercial assistance to clients [600]. - The Strategy Committee was created to inform and make recommendations regarding the company's strategic plans and meets two times per year [604]. - The company’s board of directors has established several committees, including Control and Audit, Nominations, Compensation and Corporate Governance, Service Quality and Marketing, and Strategy [594]. Workforce and Employee Relations - As of December 31, 2018, the company had 32,638 employees, with 35.9% in production and operations, 38.1% in sales, 19.1% in customer care, and 6.9% in support [605]. - Approximately 11.9% of the company's employees are union members, represented by various unions across all 26 states and the Federal District [608]. - The collective bargaining agreement for employees was renewed for 100% of the workforce on September 1, 2018, effective until August 31, 2020, covering social clauses [609]. - The company has never experienced a work stoppage for a significant period that materially affected operations, indicating good workforce relations [609]. Executive Compensation and Leadership - The total compensation for directors and executive officers for the year ended December 31, 2018, was approximately R$26.4 million, with R$17.5 million in salaries and R$8.9 million in bonuses [584]. - The aggregate compensation for directors and executive officers reflects a significant investment in leadership, indicating a commitment to governance [584]. - The Board of Directors typically meets once every three months, with special meetings called by the Chairman as needed [585]. - The Board of Directors is responsible for establishing general business policies and supervising management activities [586]. - David Melcon Sanchez-Friera has served as Chief Financial and Investor Relations Officer since April 2016, bringing over 20 years of experience in the telecommunications industry [582]. - Christian Mauad Gebara has been the Chief Executive Officer since January 1, 2019 [580]. - The company does not provide pension, retirement, or similar benefits to its directors and officers [584]. - The Chairman of the Board has a casting vote in the event of a tie during Board meetings [585]. Pension Plans and Employee Benefits - 28.9% of the total workforce are participants in the company's private retirement plans [624]. - The company migrated 5,829 employees (64% of participants) to the Visão Telefônica plan in March 2017 [622]. - The Visão Multi Pension Plan allows participants to make basic contributions of 1-2% and additional contributions of 0-5% of salary, with the company contributing between 50% to 125% based on length of service [616]. - The company became a sponsor of private pension plans for GVT Group employees in May 2015, migrating 259 participants to the Visão Multi plan by March 2016 [618]. - The Performance & Investment Plan (PIP) resulted in 68 executives receiving 258,552 shares of Telefónica S.A. after achieving the minimum Total Return to Shareholders (TRS) in the 2012-2015 cycle [626]. - The Talent for the Future Share Plan (TFSP) has 120 executives eligible to receive 977,737 shares of Telefónica, S.A., with an accrued value of R$9.5 million as of December 31, 2017 [636]. - The company established defined contribution plans in 2000, financed by contributions from employees and the company as a sponsor [613]. - The Visão Prev entity was created in 2005 to manage pension plans for the Telefónica group in Brazil, transferring management from Fundação Sistel [614]. - The company implemented administrative fees for the Visão Multi plan in July 2016 to improve efficiency in managing private pension plans [620]. - The merger of multiple pension plans into the Visão Telefônica plan was approved in September 2015, consolidating various plans under one management [617]. - The new TFSP plan approved on June 8, 2018, allows executives to receive shares of Telefónica after three years based on performance metrics [638]. - The plan consists of three independent cycles, each lasting three years, with the first cycle from January 1, 2018, to December 31, 2020 [638]. - Share delivery is contingent on achieving economic-financial objectives, including Total Shareholder Return (TSR) and Free Cash Flow (FCF) goals [638]. - TSR accounts for 50% of the shares delivered, measuring the cumulative change in Telefónica's share value and dividends over the cycle [638]. - FCF also accounts for 50% of the shares, with annual goals set by the Board and final achievement calculated as an average of annual partial achievements [638]. - The 2018-2020 cycle is scheduled for December 2020, with 144 executives eligible to receive 122,250 shares, valued at R$1.2 million as of December 31, 2017 [639].